To be or not to be

The civilian nuclear cooperation between India and the US is expected to be a key item on the US President’s agenda when he visits India later this month. It may be recalled that a contact group was established during Prime Minister Modi’s visit to the US last September to breathe fresh life into the dawdling deal. The group met for the first time in December last year and was slated to meet earlier this month. Among the proposals that appear to have emerged from their discussions on the subject of liability, one pertains to clarification of Section 46 of the Civil Liability for Nuclear Damage Act, 2010 (the Act) (http://www.thehindu.com/news/national/obamas-visit-may-see-breakthrough-in-nuclear-deal-kerry/article6781050.ece). The section states that the provisions of the Act “shall be in addition to, and not in derogation of, any other law for the time being in force, and nothing contained herein shall exempt the operator from any proceeding which might, apart from this Act, be instituted against such operator.” The genesis of a request for clarification would be the considerable confusion around operator and supplier liability for nuclear damage.

The Act is a curious piece of legislation, unclear about its objectives and nowhere is this more evident than in the manner in which the civil liability for nuclear damage is sought to be dealt with. Consider the following. As against the higher standard of the tortious principle of “absolute liability” which the Supreme Court enunciated in the case of M C Mehta Vs. Union of India (AIR 1987 SC 1086) (which principle holds the defendant absolutely liable without any exceptions), the Act envisages in its preamble, and codifies in its provisions, a strict and no fault liability regime through channelling liability to the operator viz.,

– the operator is strictly liable on a no fault liability basis i.e., without requiring to prove fault on the part of the operator in order to claim damages from him. However, the liability is limited in time as well as maximum compensation that can be claimed and subject to exemptions viz. the operator is not liable for the nuclear damage where the incident is caused due to a grave natural disaster of an exceptional character, armed conflict, civil war, hostility, terrorism or insurrection.

– The Central Government assumes liability for amounts over and above that assumed by operator as well as with regard to the exemptions mentioned above. This is also capped in terms of time and amount.

On the other hand however, the Act derogates from the principle of channelling it purports to enshrine, and allows the operator a right of recourse to the supplier under Section 17 (read with Rule 24 of the Civil Liability for Nuclear Damage Rules, 2011.) Further, while the objective of the Act appears to have been to provide a special and exclusive mechanism to deal with civil liability for nuclear disasters, several provisions cast a doubt on this:

– Section 9 states that whoever suffers nuclear damage shall be entitled to (as opposed to shall only) claim compensation under the Act. This could suggest the Act is not a sole and exclusive avenue for claimants.

– Proviso to Section 5 (2)) states that any compensation payable by an operator for nuclear damage will not reduce its liability under any other claim for damages under other laws. In other words, it envisages claims under other applicable laws although this proviso, incidentally, is incongruous with the main provision in terms of its placement as the main provisions deal with exemptions to liability of operator. Unless of course the idea was that despite ring fencing the operator’s liabiliy under the Act, he would be open to claims under other laws in any event if they provide for liability regardless of such exemptions.

– Section 46 adds to the confusion as it purports to save the operation of other laws. Thus, even if one were to argue that all liability is to be channeled through the operator with a limited right of the operator to seek recourse against supplier under the Act, the above provisions leave the door open for questions regarding suppliers’ liability, and the possibility and scope of operators’ liability, under other laws.

By most accounts, there seems to be little political will to amend the Act at this juncture and it remains to be seen if and how a clarification may be sought to be provided. Also, the constitutional validity of the Act has been challenged before the Supreme Court. Be that as it may, this may be an opportunity to revisit the liability regime and attempt a clarification albeit with caution, bearing in mind our experience of similar disasters and a clearer understanding of our own jurisprudence and our policy objectives in case of a nuclear disaster.

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This is a community blog by the public policy students, alumni, scholars and staff of the Takshashila Institution. The opinions are those of the respective authors and do not represent the position of the editors or that of the Takshashila Institution.